The Financial Conduct Authority's (FCA) Consumer Duty principle represents a step change in regulation in that it focuses on achieving ‘good outcomes’ for customers. The clear intention here is not just to focus on processes, but to change the conduct of firms and promote a genuinely customer-centric culture in financial services organisations. Many firms aspire to this already, in which case the regulation represents a great opportunity to improve further and get better at measuring and demonstrating the fact.
Re-evaluating the customer journey: a must for compliance
Consumer Duty focuses on four key areas of the customer relationship:
communications and customer understanding
products and services
price and value
Compliance requires a re-evaluation of every part of the customer journey from a customer perspective, and the focus on outcomes applies especially to those customers with characteristics of vulnerability. The responsibility will be with the organisation to be proactive in their approach to conduct risk and strive to anticipate and prevent harm within its customer base and be able to demonstrate this to the regulator.
As The Duty affects almost every part of an organisation, from risk and operational departments to product and marketing teams, the journey towards initial compliance by July 2023 is likely to comprise many different initiatives happening concurrently. Whilst the FCA has indicated that it requires substantial compliance by day one, it sees the process as iterative and is challenging organisations to continue improving and delivering better outcomes for customers. This is very much intended as an ongoing process.
Leveraging data to meet Consumer Duty
According to the authority, “The Duty forms part of the FCA's transformation to becoming a more assertive and data-led regulator.”
It’s no surprise that this principle is making organisations reconsider what data they are collecting and whether it is sufficient to drive good customer outcomes as well as monitor them and be able to evidence this to the regulator. Existing data can often be repurposed to do this, but there are other opportunities to collect additional data at key moments of customer interaction, e.g. when the customer is deciding if the product is right for them.
At Jaywing, we have vast experience supporting clients in all disciplines which form part of a Consumer Duty initiative. We have identified particular areas where our expertise in other domains can play a significant part in helping to achieve and monitor better outcomes: behavioural science, user experience and customer experience.
The intersection of behavioural science, UX, CRO and good outcomes
The FCA wants communications to “equip consumers to make effective, timely and properly informed decisions” about financial products and services. Whilst marketing materials together with outbound letters and emails about specific products will support this, a substantial proportion of product acquisition, purchase and application is now done online. Website application processes are designed to be convenient, intuitive and easy to use whilst maximising conversion from paid media referrals to make best use of marketing spend. The new requirement to ensure compliance with Consumer Duty regulations adds additional factors to consider.
Customers arrive at the website from different sources (e.g. a Google search, a comparison site, a banner ad etc.) and, as a consequence, they are likely to have different expectations (based on what they were looking for) and different levels of understanding. Whilst some customers will understand the products and pricing well, others may be less financially savvy, or have special access needs or other vulnerabilities. The new regulation demands that outcomes are consistently good across all these groups. This is where behavioural science and UX/CRO come in. For years, these disciplines have been focused on improving usability and performance of websites for all users, with behavioural science insights, best practices, tools and AB testing all deployed to achieve optimal performance. Consumer Duty compliance simply adds a new requirement to the list of target objectives, to ensure good customer outcomes.
The underlying data captured when customers use the website is also a valuable resource which is often under-used. For many years, Jaywing has been capturing individual level website data, linking it to other customer data and using it to make marketing more effective and provide customers with better, more personalised experiences. The data contains details of how customers have used a website including use of help screens, explanation pop-ups or price calculators. The data also represents a specific audit record of the process each customer took on their way to making a financial decision, and the information they made use of. By design, it can also capture customers responses (e.g. was this information helpful). Collation and analysis of this data can help identify lack of information and even vulnerability and can be used to assess whether the website, information and application processes are supporting customers across all knowledge and vulnerability levels in making the timely and properly informed decisions that the FCA is targeting.
By collating with existing data resource, this adds an additional dimension to Customer Duty outcome reporting by providing much more detail about how the customer made the purchase decision in the first place, and can also provide valuable information about a customer’s financial objectives – a guideline which the Duty expects organisations to try meeting.
How Jaywing can help
Our experts can review, assess, and enhance product-level web application processes to align the customer sales journey with obligations under the Consumer Duty. This can be done as a remote project delivering:
- An audit of the website application process for each product with respect to customer centricity and informed decision making
- Remote user testing including attention mapping, eye-tracking and emotional analysis tools and techniques
- Using Treejack or Card Sort experiments to challenge website structure with respect to delivering Consumer Duty requirements
- Accessibility audit to assess website against WCAG (Web Content Accessibility Guidelines) and vulnerability measures
To be even more impactful, with greater access to your website via current (or additional) tooling and the GA / tagging data stored, our consultants can provide a more in-depth and detailed analysis, delivering:
- Analysis of the data showing page performances, entry exit points, technical insights etc.
- Interaction analysis and surveying using an on-line survey tool
- AB testing to test key findings against actual customer outcomes
- Evaluation and set-up of tag data at an individual level to capture and record customer journeys and objectives to use in subsequent reporting
The output of these processes would provide strong evidence that website application processes are compliant with Consumer Duty requirements, and also that data are recorded and used to demonstrate compliance. It can run as an entirely separate piece of work to other Consumer Duty initiatives, whilst also making the data available for integration with other reporting.
Incorporating the output from this process, plus data from a variety of sources during the customer life with your organisation will allow you to generate new levels of data-driven insights covering all channels and learn to fully understand your customer and how you are serving them.
The data can also be used to leverage data mining and explainable machine learning techniques to produce accurate, predictive models that allow you to predict, and prevent, foreseeable harm to customers, and closely monitor good outcomes via a feedback loop to product design and development.